Without Iraqi oil in the global market, the IEA predicts that oil would be $15 (£9) a barrel more.

But geopolitical concerns over Iran, and strategic security of oil routes through the constricted Strait of Hormuz to Asia, will also be factors in coming years.

The shift occurs as China reconfigures its naval forces from a brownwater fleet to a bluewater force, gaining experience with its first aircraft carrier and expanding submarine capabilities.

The US has planned to balance growing Chinese defence expenditure by building a new base for Marines in Australia's Northern Territory and elsewhere, building bonds with India and using so-called smart power techniques.

The IEA said Iraq stands to make $5trn (£3.14trn) in revenues - giving it some $200bn (£125bn) annually - but warns against falling victim to the so-called resource curse.

"It is an opportunity to transform the country's prospects," the agency said.

"Translating oil export receipts into greater prosperity will require strengthened institutions, both to ensure efficient, transparent management of revenues and spending, to set the course necessary to encourage more diverse economic activity."

Gas 'fracking' has been trialled in Britain and the technology may allow further extraction from previously unviable or seemingly exhausted fields.

:: On Monday, prospector Petrel Resources (LSE: PET.L - news) saw a 300% increase in its share price after announcing it had found up to a billion barrels of oil 120 miles offshore from Kerry at a drill depth of 2.5 miles from the sea surface.